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The European Commission delays the Korean Air-Asiana Merger Probe.

Photo by Miguel Ángel Sanz / Unsplash

European Commission delays Korean Air-Asiana merger probe over competition concerns.

Why it matters: The European Commission (EC) has delayed investigating the proposed merger between Korean Air Lines Co. and Asiana Airlines Inc.

The South Korean carriers requested more time to address competition concerns, resulting in a delay in the EC's decision that could have broader implications for airline industry consolidation.

The Key Points

  • The EC's decision on the merger has been delayed by over two months, raising fears of airline consolidation's possible delay or collapse.
  • Concerns about reduced passenger and cargo traffic competition on specific routes between South Korea and Europe prompted the EC to issue a Statement of Objections (SO) to Korean Air last month.
  • Korean Air and Asiana Airlines currently operate more flights on Korea-Europe routes than European carriers, raising questions about maintaining a competitive balance after the merger.

The Big Picture: The Korean Air-Asiana Airlines merger, first announced in November 2020, is being reviewed by competition authorities in 14 countries, with only the European Union, the United States, and Japan yet to approve it.

The proposed KRW 1.8 trillion ($1.4 billion) deal would create the world's seventh-largest airline, underscoring its importance in the global airline industry.

Korean Air and Asiana are the two largest airlines in South Korea, with extensive domestic and international operations.

Their combined dominance on several routes may raise competition concerns and affect the competitive dynamics of the aviation market in South Korea and beyond.